Question

Explain some of the Potential penalties that accounting firms or accountants may face for behaving in an unethical manner

Answer 1

Three main drivers of unethical strategies and unethical managerial and business behaviour are as follows:

--Short-termism: This means the managers tendency to focus excessively on short-term performance goals at the expense of longer-term strategic goals. These has negative implications for the likelihood of ethical lapses and performance of company in the longer run

--Faulty internal oversight / Self-dealing: This occurs when managers take benefit of their position to further their own private interests instead of company. It permits self-dealing in the pursuit of personal benefits, wealth, power, status, and selfish interest

--Unethical company cultures: A company's culture that puts business and profitability performance ahead of ethical behaviour

Stakeholders of an organization for potential penalties in an unethical manner can include stockholders/shareholders, customers, suppliers/vendors, /wholesalers /retailers, employees, federal government, creditors, or community. Due to unethical corporate behavior

--Employees could lose their job

--Stockholders could lose value of their stock ownership

--Suppliers may not be paid for invoices when a firm declares bankruptcy

--Customers don't receive poor service quality